Flourishing consumption can boost pace of GDP expansion
Figures released on Tuesday by the National Bureau of Statistics (NBS) showed the domestic economy was stable in November, and experts said that while China has been "doing fine" this year, conditions may become more complex and unpredictable in 2017.
Mao Shengyong, a spokesperson for the NBS, said that in November China's economic conditions were generally stable with signs of improvement. He spoke during a press conference held by the State Council Information Office on Tuesday.
Ding Jianping, a finance professor at the Shanghai University of Finance and Economics, also said that China's economic performance in 2016 has been fine. "There are problems, but China has outperformed many other countries in terms of economic development," he noted.
According to the NBS, retail sales amounted to 3.09 trillion yuan ($448 billion) in November, up 10.8 percent year-on-year. The growth rate was a bit higher than the 10 percent pace in October.
"The flourishing consumption sector may be due to the pent-up demand that was released with the Double 11 shopping promotion, which pushed up sales of certain commodities like cosmetics and household electrical appliances," Liu Dongliang, an analyst at China Merchants Bank, told the Global Times on Tuesday.
Mao noted that car sales jumped 13.1 percent year-on-year in November, compared with 8.7 percent growth in October, making a good contribution to the consumption sector.
Ding said that Chinese consumers, particularly young ones, have strong potential purchasing power, and it's important to tap that potential to fuel domestic economic growth.
"The key to enhancing consumption is to increase the incomes of young consumers with policies such as tax cuts," Ding said.
Investment activity was also stable in November with highlights in certain areas. Fixed-assets investment was 5.41 trillion yuan in November, up 8.7 percent year-on-year, compared with an 8.3 percent growth in October.
Liu stressed that local project investment was a highlight in November, reaching a five-month high. This shows that local governments are increasingly motivated to invest in projects, which has positive significance for the investment sector in 2017.
Local project investment surged 8.8 percent year-on-year from January to November, up from the 8.7 percent growth in the first 10 months.
Investment in the real estate sector reached 9.34 trillion yuan in the first 11 months, up 6.5 percent year-on-year. The growth shrank from a rate of 6.6 percent from January to October, the NBS data showed.
Liu nevertheless noted that the domestic real estate sector decelerated only mildly, and the sector will still make positive contributions to the domestic economy, at least in the first half of 2017.
The industrial sector also showed strength in November, with industrial added value expanding 6.2 percent year-on-year, up from 6.1 percent in October.
Ding noted that economic growth in 2016 won't stray too much from the 6.9 percent figure in 2015. He declined to give a specific number.
China had GDP growth of 6.7 percent in the first three quarters in 2016.
Ding said that the domestic economic situation will be more complicated in 2017, particularly because of the new US government's uncertain policy stance.
Liu noted that under the circumstances, government monetary policy will largely remain stable. "The focus will be more on controlling financial leverage," he said.
